How the “Internet of Things” is Interrupting Manufacturing Leadership

By Jill George, Ph.D.

Change, change, and more radical change. That’s what’s occurring in the manufacturing industry, especially with the adoption of new technology and the Internet of Things (IoT) as part of Manufacturing 4.0, the next industrial revolution. Yet, despite the apparent promise of IoT to advance humanity, manufacturing leaders may still bristle at it instead of embracing it. Why? Because, as usual, it all boils down to “what’s in it for me” when it comes to leaders embracing new technology.

What is IoT?

IoT is an advancement of the Internet in which everyday objects have network connectivity, allowing them to send and receive data. The Internet of Things (IoT) is an environment in which objects, machines, or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction, extending human capacity.

Examples:

Machines contacting a cell phone when a storm knocks out their power.

Manufacturers having six hours of raw materials on hand at any one time, given tight data transfer with suppliers.

Machines telling maintenance or other machines when they need to be upgraded/fixed and how to increase production yield.

And, of course, wearable fitness devices.

M2M (machine to machine) communication to transfer data internally and externally, using standard proactive protocols, security, and predictive analytics will be a mandatory competency for most manufacturing organizations that today don’t see themselves as software/data transfer companies.

According to Gartner, 40 percent of organizations believe the IoT will have a significant impact on their business over the next three years. A recent study by the Manufacturing Leadership Council reports adoption near 80 percent (2015). Yet, only a small number of companies have established clear leadership roles and put systems into production that can help harvest the value of IoT. Many manufacturers are paralyzed by customers requiring them to use the Internet of Things in their supply chain, much less thinking about the “why change” and role clarity for leaders or the talent implications on the kinds of leaders and production workers they need to hire, train, develop, and promote.

The “What’s in it for me?” of IoT

"Leaders’ fear for their own roles is the major obstacle to overcome."

IoT represents massive changes, and knowledge about the implications to leaders’ and workers’ jobs is limited. It’s desperately needed, however, as leaders and team members don’t understand the capabilities and value proposition for them personally. The main leadership challenge for IoT execution is fear of becoming obsolete given the new technology. What are the key sources of leader fear?

Where exclusive data used to be hoarded for “power” within functions, it now can be shared directly across functions with no screening or hoarding possible. That means perceived loss of power or ability to add value via their previous levels of expertise.

IoT can create a job design “vacuum,” where manual parts of the job that were perceived as important, such as screening data and integrating data are now done automatically.

What remains for the leader to do that adds equal perceived value? Leaders may prefer to perform the mundane and administrative data tasks rather than take the leap to adopt technology that would clearly increase their performance. For example, consider the distribution leader for a major manufacturing site: sales performance jumped seven percent after implementing IoT because the automated data made information from sales go directly to distribution and automated picking, packing, and product replacement. Yet, the leader resisted the IoT implementation, reverting back to old reports. Leaders’ fear for their own roles is the major obstacle to overcome.

How IoT changes leaders’ roles within manufacturing plants

Hoard data within their silos – on their personal desk/desktop – resulting in data that is not tied together.

Use data and predictive analytics up and down stream with suppliers and maintenance proactively to reduce costs and nonvalue added time taken out of their roles.

Look to the past within their silo and optimize existing processes; more administrative tasks.

Think ahead, feeling obliged to tinker with and wholly reimagine processes using IoT to delight the customer; take on complexity, not just embrace it.

Focus on sub-processes in isolation.

Leverage IoT and a whole process view to include upstream suppliers and customers downstream to keep the whole process running with agility. Redirect the supply chain, tying sales, raw materials and plant operations together for higher level decision making and response to customer needs.

Focus on standard operating procedures in place.

Adapt to extreme lean, creating better ways to conduct changeovers more quickly and anticipate what customers and machines need. Align with many different manufacturers.

Use data to better identify how the process doesn’t work the way the SOPs say it does work.

Use data for routine functioning, static and delayed reporting.

Coach intensely to scale the use of data (harness its value) across team members to redirect, improve, and increase speed via data.

Understand options for data transfer and quick turn prototyping

Understand IT infrastructure

What can be done to better prepare leaders for IoT?

Given the certain changes to leaders roles, what steps can you take to prepare leaders for change, address the “WIIFM,” and improve success and adoption?

Step 1: Design Enriched Jobs, Don’t Just Implement Technology – Job design is organizing the tasks and responsibilities of a job so that the leader experiences meaning, feels responsible for outcomes, and understands the results of their efforts. As indicated in the table above, IoT represents the opportunity to be more engaged with the customer and drive solutions to better meet their needs. But this job implication is not well understood. For many, the IoT feels like too much job simplification as a result of poor job design. Answering the following questions can help improve the fit between technology and job design:

How is the use of the IoT impacting leaders’ roles?

What percent of the job duties are reduced by IoT?

What more strategic tasks could be done as a result? What can be done to leverage IoT to enrich leaders’ jobs, not just simplify or reduce manual tasks?

Step 2: Define New Competencies Required For Success – Help leaders understand what skills and abilities they will need to focus on as their jobs evolve with the use of IoT. Example competencies, or sets of behaviors, that will be needed include Establishing Strategic Direction, Driving Innovation, Leading Change, and Coaching for High Performance. How are these key competencies reflected in the way your leaders are currently developed, evaluated, and promoted? How different are these competencies from what they already do? Defining “what good looks like” in terms of key behaviors required in the IoT world as opposed to having leaders figure out what is required for success on their own will greatly improve leader confidence and motivation.

Step 3: Prepare Leaders for Change with Assessment and Development – Because competencies are likely to change given the new IoT technology, your leaders will almost certainly have gaps in the skill sets needed. But where are the gaps and how wide are they, individually and as a group? Using assessment simulations and testing can provide insight into development needs in the competencies listed previously as examples for both individuals and groups, and can pin point what combination of development courses, projects, benchmarking, on the job training, and coaching would best close the gaps and accelerate success. Development planning based on assessment is a great way to increase leader confidence and address the “me” issues.

You have likely spent serious time designing and implementing your IoT system. Don’t risk that investment by not spending time clarifying and enriching your leaders’ roles, defining the key behaviors they now need for success, and developing gaps they are certain to have as their roles evolve.

Special thanks to Rita Kocjancic, Cathie Godard, and Kelly Crofoot, Strategic Account Managers, for their contributions to this article.

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